Securitization in the 1920’s
33 Pages Posted: 2 Feb 2010
Date Written: January 15, 2010
Abstract
This paper quantifies the scale and scope of the commercial real estate mortgage bond market in the period surrounding the 1920s in an attempt to better understand the role of retail mortgage debt in early urban development. In particular, this paper quantifies the size of the market, identifies risk factors affecting the coupon yield spread over Treasuries and utilizes a unique data set to construct a commercial mortgage price index over the period 1926-1935.
A substantial retail appetite for real estate securities during this period may have significantly contributed to a real construction boom, but overly optimistic speculation in these securities may have led to overbuilding. The rapid deterioration of these securities and a near complete drop in issuance show, ex post, that investors were overconfident in building fundamentals during the boom years. The breakdown in the value of real estate securities as collateral assets preceded the crash of 1929 and may have contributed to the fall of asset prices more generally.
Keywords: Real Estate, Securitization, mortgage
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Government Response to Home Mortgage Distress: Lessons from the Great Depression
-
Lessons from the Great American Real Estate Boom and Bust of the 1920s
-
The Anatomy of a Residential Mortgage Crisis: a Look Back to the 1930s
-
The Influence of the Home Owners' Loan Corporation on Housing Markets During the 1930s
By Price V. Fishback, Alfonso Flores-lagunes, ...
-
Covered Farm Mortgage Bonds in the Late Nineteenth Century U.S
-
By William N. Goetzmann and Frank Newman
-
Repairing a Mortgage Crisis: HOLC Lending and its Impact on Local Housing Markets
-
Repairing a Mortgage Crisis: Holc Lending and its Impact on Local Housing Markets
-
The Interwar Housing Cycle in the Light of 2001-2011: A Comparative Historical Approach
-
The Interwar Housing Cycle in the Light of 2001-2011: A Comparative Historical Approach